Hyundai Motor Group Unveils Mid-Term Plan, Kicks Off Value-Up with Enhanced Market Communication

Hyundai Motor Group Announces 68 Trillion KRW Investment Plan Over 3 Years
Hyundai Motor and Kia Net Cash 32.5 Trillion KRW... 30% Increase YoY
Investment Plan Revealed to Strengthen Market Communication and 'Value Up'
GBC Project Plan Revised... Cost Savings Invested in New Businesses

Hyundai Motor Group's announcement on the 27th of a large-scale investment and hiring plan is interpreted as a strong commitment to firmly establish the industrial ecosystem related to future mobility within South Korea. As supply chain issues frequently arise and global protectionism intensifies, competition among countries to secure a base for future vehicles is becoming increasingly fierce.

The background of this mid-term plan announcement also includes strengthening communication with the market. As Hyundai Motor Group achieved record-high performance last year and its net cash holdings increased, market interest grew. Accordingly, the group revealed detailed plans for new businesses and investments at the time when affiliate shareholders' meetings concluded. The aim is to dispel market doubts and enhance the undervalued value of group companies. Additionally, by mentioning domestic employment scale, the group emphasized corporate social responsibility.

According to Korea Ratings, Hyundai Motor and Kia's net cash holdings last year amounted to 32.5 trillion KRW, a 30% increase compared to the previous year. Until 2020, Hyundai Motor and Kia's net cash holdings remained in the 10 trillion KRW range, but after achieving record-high performance for two consecutive years, it increased to the 30 trillion KRW range. Accordingly, Hyundai Motor Group announced detailed new business concepts and investment plans. Presenting how to invest and execute the increasing cash holdings is closely related to enhancing corporate value and shareholder return policies.

Hyundai Motor Group's average annual investment scale will be 22.7 trillion KRW, more than 30% higher than last year's investment of 17.5 trillion KRW. Of the planned investment amount, 31.1 trillion KRW will be allocated to research and development (R&D) focused on electrification, software-defined vehicles (SDV), and battery technology internalization, which accounts for half of the total. The remaining half will be used for capital expenditures such as building dedicated electric vehicle factories and the Global Business Center (GBC) project.

Large-scale investments will be made in constructing dedicated electric vehicle factories, which will be sequentially operated. In the second quarter of this year, Kia will complete an electric vehicle factory in Gwangmyeong and start producing the small electric vehicle EV3 for sale in the global market. In the second half of 2025, Kia will establish an electric vehicle factory in Hwaseong to produce customer-tailored purpose-built vehicles (PBV).

Hyundai Motor Group Chairman Chung Euisun is delivering a New Year's address at the Hyundai Motor Group 2024 New Year's meeting held in January at Kia Autoland Gwangmyeong in Gyeonggi Province.
[Photo by Yonhap News]

By industry, 63% of the investment, amounting to 42.8 trillion KRW, will be directed to the finished vehicle sector. This includes not only the new electric vehicle factory projects but also hydrogen business and advanced air mobility (AAM). The remaining 25.2 trillion KRW will be invested in parts suppliers, steel, construction, finance, and other related businesses. In particular, the parts sector will continue investing to increase orders from not only group companies but also global automakers by expanding electrification technology development and facility investments.

Hyundai Motor Group announced plans to directly employ 80,000 people. Considering additional employment in the parts industry, the total employment effect is expected to reach 198,000 people. Especially, due to the electrification transition in the finished vehicle sector, a large-scale recruitment of personnel related to new electric vehicles, dedicated parts, and innovative electric vehicle manufacturing and production technologies will take place.

Hyundai Motor Group also revealed the outline of the GBC project, which will become a landmark in Seoul. The GBC-related project is expected to generate a cumulative investment of 19.5 trillion KRW and create approximately 56,000 new jobs by 2030. Recently, Hyundai Motor Group submitted a revised design proposal to the Seoul city government, changing the original plan of five low-rise buildings in a 105-story tower to two buildings of about 50 stories each. The investment savings from this process will be intensively allocated to landmark design development in collaboration with world-class architects, application of carbon reduction eco-friendly technologies, and Hyundai Motor Group’s next-generation mobility (UAM, PBV, robotics), among others.

This content was produced with the assistance of AI translation services.